President hails Informal sector's contribution

In developing countries, the majority of the people's livelihood depends on the informal sector making it an integral part of the economy, opined President Dr Ram Varan Yadav while inaugurating an international conference on measuring informal economy in developing countries here today.
However, measuring the depth and scope of the informal economy is a challenging task, he said adding that by its nature its larger than the formal economy.
The conference -- organised jointly by South Asian Institute of management (SAIM) and International Association for Research on Income and Wealth (IARIW) will hold serious discussions during their sessions on Thursday and Friday.
Welcoming guests from over 30 countries, Centre for Economics and Applied Statistics (CEAS) director Dr Bishnu Dev Pant said the informal sector is very important for developing countries like Nepal. "Its role has been increasing as a major part of the economy is outside the radar of national statistics," he said. "Measuring the informal economy is thus one of the main themes of the special conference." He added that measurement is useful only when it serves the needs of policy makers. "Nepal is one of the weakest in the region in terms of research on statistics as it has never been the government's priority."
CA member and former finance minister Dr Prakash Chandra Lohani said the word informal sector was coined in 1971 in Ghana. "The informal sector acts as a shock absorber in the economy of countries like Nepal," he said adding that more than 90 per cent of domestic labour is in the informal sector and its contribution to the gross domestic production (GDP) stands at over 51 per cent.
Although the largest part of GDP may be generated by the formal economy, most people in developing countries live in the informal one. They derive their income from subsistence farming or by operating small unincorporated enterprises. However, to gauge their contribution in real terms, brainstorming is needed and the conference -- attended by over 70 professionals from across the globe -- will brainstorm for two days, IARIW chair Dr Andrea Brandolini said.